GLOBAL - Conflicting trends are still causing confusion - but property investors will have to accept anxiety over debt and regulation as a fact of life, according to the new head of the Investment Property Forum (IPF).
Aegon Asset Management head of property Phil Clark told IP Real Estate: "There's more reason to feel positive than there was two or three years ago because the market has seen some recovery.
"But there is also reason for caution because of deregulation and deleveraging. It's well documented that there is some leverage that still needs to be taken out of the market - and that the amount of debt will need to come down still further in the next few years.
"The orderly rebalancing has started, but it will take a while longer, and it won't be over by the end of this year."
In the meantime, he forecast that prices for top-end secondary assets would remain static or increase.
"If you look in London, New York, Frankfurt and Paris, investors are typically starting to look a good secondary," he said.
"Poor secondary and tertiary assets have some way to go. For poorer-quality assets, values will continue to slide in the short term."
Alluding to comments made at an IPF dinner this week that the industry shares a "slight sense of schizophrenia", Clark pointed to Solvency II, which makes it more attractive for insurers to lend to real estate, but discourages them from investing directly because of the additional cost of capital.
He said such market dichotomies would continue for the next few years and that the industry needed to be "open and honest" about the implication of these challenges for the industry - "whether they are positive or negative".